To Understand Rising Inequality, Consider Janitors • Hacker News Board

Re: To Understand Rising Inequality, Consider Janitors

#361

Post by jhayward » Sun, Sep 03, 2017, 9:02 PM UTC

lend000 wrote: post #251

choxi wrote: post #180

We should tax wealth, not income. [1] The majority of income the top 0.1% make is from investments and gets taxed as capital gains, only about 15% of their income is taxed as ordinary income. [2][3] We have an economic system where it's dramatically easier to make money the more money you already have. If you have $50M, you can park it in an index fund to get 4% returns and make $2M every year just off of your invest…

Easier said than done -- not all wealth is liquid. What if someone has all their wealth in one or two real estate properties? Or a family heirloom gem collection which is worth a lot but which they refuse to sell (and otherwise are not wealthy)?

Easy, you do what is done with senior citizens who owe property taxes. The taxes accumulate without being paid and are collected when the property is transferred to an inheritor or buyer.

Re: To Understand Rising Inequality, Consider Janitors

#362

Post by ericd » Sun, Sep 03, 2017, 9:03 PM UTC

Forlien wrote: post #309

ebfd wrote: post #120

Earlier quoted context omitted.

Score on IQ tests is a far better predictor of SES than parental SES. Someone in the 95th percentile for IQ will, on average, earn more than someone with parents in the 95th percentile of earnings. See: http://www.emilkirkegaard.dk/en/wp-content/uploads/Intellige...

IQ might be a better predictor, but the linked paper says it's not a far better one: "The results demonstrate that intelligence is a powerful predictor of success but, on the whole, not an overwhelmingly better predictor than parental SES or grades."

That might just mean that intelligence is useful not only for gaining personal success, but also for raising offspring who will be successful. Is that a problem that society should try to correct?

Re: To Understand Rising Inequality, Consider Janitors

#363

Post by mjevans » Sun, Sep 03, 2017, 9:05 PM UTC

choxi wrote: post #180

We should tax wealth, not income. [1] The majority of income the top 0.1% make is from investments and gets taxed as capital gains, only about 15% of their income is taxed as ordinary income. [2][3] We have an economic system where it's dramatically easier to make money the more money you already have. If you have $50M, you can park it in an index fund to get 4% returns and make $2M every year just off of your invest…

Broadly, I see three categories where taxes could be applied:

    * Wealth (accumulated capitol)
    * Income (acquired capitol)
    * Consumption (utilized capitol)

The problems with income and consumption based taxes include:

    * Double taxation (which side is taxed, both?)
    * Inequality / Regressive (generic taxes target the poor/middle)
    * 'sitting on capitol' isn't taxed

A good fresh start is probably necessary.

    * Taxes exist to fund the public good.
    * Taxes should target undesired (by the community) behavior
    * Incentives should target desired behavior
    * You are what you measure and how you react (punish/reward)

With the above in mind, I am entirely for two types of taxes.

Income: A maximum income target and a 'minimum' income target. These two numbers would be plugged in to a single non-linear formula that applies to all. The more someone makes, the more they're taxed (they would always take home more, but for every dollar over they'd take home less of that dollar). B.I.G. could be built in to this formula as a third number (mostly raising the floor); but to me the minimum number already sounds like it is this number.

Wealth: Some savings is a good idea. Having a year or two of runway (disaster preparedness). Saving to move in to a house. Investing* in active things (stocks/bonds/etc) for retirement. Owning your own means of production / transportation / housing (within reason).

Wealth is more static, when wealth suddenly shows up it should be taxed as income. When it's held over time it should be taxed at a much lower rate, but still taxed (every period, IE year). Society should agree on a divisor that is fair, and how much different types of wealth are discounted. 'wealth' (divided down) would thus be figured in to the total tax liability on the compound curve I described in the income section.

Re: To Understand Rising Inequality, Consider Janitors

#364

Post by esarbe » Sun, Sep 03, 2017, 9:06 PM UTC

Sniffnoy wrote: post #353

esarbe wrote: post #321

What strikes me the most when looking at many of the comments here is the blatant disregard for human suffering that extreme inequality and the resulting poverty cause. The current economical status quo is accepted as a given and all the harm it causes is dismissed with the shrug of a shoulder. "It can't be helped, the poor sods should have made better life choices to avoid ending up as janitor" is the attitude by wh…

> What strikes me the most when looking at many of the comments here is the blatant disregard for human suffering that extreme inequality and the resulting poverty cause. Apologies to pick on you without addressing your main point, but this sentence is an example of an error I see a lot yet I rarely see addressed. Specifically, you're claiming a chain of causation where by inequality causes poverty. But in fact the r…

Thanks for you thoughtful reply.

>Apologies to pick on you without addressing your main point, but this sentence is an example of an error I see a lot yet I rarely see addressed.

You're not picking on me - you're picking on something I wrote. This is perfectly fine!

Would you think it more appropriate to talk of poverty and inequality being elements in a feedback loop?

Re: To Understand Rising Inequality, Consider Janitors

#365

Post by ericd » Sun, Sep 03, 2017, 9:07 PM UTC

tomjen3 wrote: post #230

adwhit wrote: post #103

Earlier quoted context omitted.

Indeed, the value of keeping toilets sanitary is far greater than that of creating the next web app. "This work is essential to the health of the population, but because of something to do with marginal economics and supply and demand and weak labor laws and class power and reserve supply of labor, I don't have to pay a proper wage, or even treat them like human beings!"

Value can be defined as how much people are willing to pay for it. Based on that, some webapps are worth more.

I think it's useful to remember that the work of one webapp developer can positively affect the lives of millions of people. Tech yields a counterintuitive amount of leverage.

Re: To Understand Rising Inequality, Consider Janitors

#366

Post by wavefunction » Sun, Sep 03, 2017, 9:07 PM UTC

jaggederest wrote: post #342

solidsnack9000 wrote: post #325

Earlier quoted context omitted.

As long as we accept the need for people to be janitors, we must accept that becoming a janitor is not a "mistake", it's a useful thing that we all want to see happen for some people. We can't on the one hand say, that we need people to do this job and on the other hand say, "tough luck" to those that do it.

Doing janitorial work is not a mistake, but being a janitor for 40 years certainly is. It's not the core job, it's the fact that there's zero growth or mobility even possible that is the issue.

>It's not the core job, it's the fact that there's zero growth or mobility even possible that is the issue.

Not everyone is a 'striver.' Some folks just want to pay their bills and enjoy what time they can with their family and friends.

Re: To Understand Rising Inequality, Consider Janitors

#367

Post by humanrebar » Sun, Sep 03, 2017, 9:12 PM UTC

esarbe wrote: post #290

erentz wrote: post #286

Earlier quoted context omitted.

They don't have to be. A "death tax" for example that takes 100% of a persons estate at death would be both simple, non distortive, and in terms of equality level the playing field every generation.

Why does this get down voted? Even if you don't agree with the idea; it has been proposed in a calm and reasonable manner. Care to explain?

It wouldn't actually work. Rich people end up finding loopholes to any tax scheme. Even if that loophole is expatriating.

It would have negative consequences besides that. Many, many people do things for "legacy". It's a powerful motivator. Taking away all wealth would eliminate something that encourages good long-term decision making.

It would hurt people who aren't the rich people. What would happen if Sam Walton's net worth was taxed when he died? Massive disruption to Walmart employees at a minimum. How would the net worth be calculated? Well, given his net worth, he'd be irresponsible not to have an army of lawyers and lobbyists making sure the number is as small as possible.

So, given the above, the idea isn't that simple.

Finally, there are ethical implications to that sort of policy. It implies that citizens earn at the pleasure of the government, not that the government rules by the consent of its citizens.

Re: To Understand Rising Inequality, Consider Janitors

#368

Post by humanrebar » Sun, Sep 03, 2017, 9:14 PM UTC

choxi wrote: post #220

conanbatt wrote: post #200

Earlier quoted context omitted.

Maybe we should stop thinking taxes are the solution to inequality. "Cutting all the high trees so the forest looks even".

Sure, I should have stated my assumption: there will always be inequality in a capitalist economy. But you can have varying levels of inequality and the extremes are probably not healthy. My suggestion above wouldn't create perfect equality, it just fixes the broken incentives we currently have that reward us for hoarding wealth and penalize us for earning it.

> ...there will always be inequality in a capitalist economy

What economy doesn't have inequality?

Re: To Understand Rising Inequality, Consider Janitors

#369

Post by WalterBright » Sun, Sep 03, 2017, 9:15 PM UTC

acidburnNSA wrote: post #304

WalterBright wrote: post #209

Earlier quoted context omitted.

> Investing in things that help society. People tend to invest in things with a high rate of return. That high rate signals it is doing things that people want done and are willing to pay for. I.e. it helps society. > a way to provide capital to people who need it That's exactly what banks do. My bank branch is plastered with posters trying to sell a loan to everyone who walks in. > passively invested in banks and th…

Have you seen The Big Short? It's on Netflix and is pretty good. The CDO manager in it claims that society must value what he does very much because he has an extraordinary net worth [1]. I'm trying to express the point expressed in that scene. You can get very rich and have high net worth while actively hurting most people. Things with high rates of return may be good investments but they may also be massive frauds,…

Government bailouts are not free market, and do indeed cause distortion and mis-allocation of investments.

That's not a good argument for raising taxes, though.

Re: To Understand Rising Inequality, Consider Janitors

#370

Post by ciconia » Sun, Sep 03, 2017, 9:15 PM UTC

The way I see it those janitors, security people and other such workers whose jobs are today almost universally outsourced, are also contributing in their own small way to the company's bottom line and to its success. Why should they be treated any different?